The relationship between a firm's quarterly investment (x) and its quarterlyturnover (y) is known to be positive. Based on data collected over the past 48quarters, it is found that quarterly investment explains 49% of the totalvariability of quarterly turnover. Moreover, it is known that mean quarterlyturnover is 5,028 thousand euros, with a standard deviation of 1,200 thousandeuros. Mean quarterly investment is 240 thousand euros, with a variance of360,000 thousand euros ²a) Find a statistic that measures the strength of the linear relationshipbetween both variables. Interpret it.b) Find the regression line of turnover on investment. Interpret the slope.c) Predict turnover if investment equals 300 thousand euros.

Solution: Given information: n= 48 observation. y= 5028sy=1200x= 240 sx2= 360000r2= 0.49

Answered: The relationship between a firm's…

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018

18th Edition

ISBN:9780079039897

Author:Carter

Publisher:Carter

Chapter4: Equations Of Linear Functions

Section4.5: Correlation And Causation

Problem 2AGP

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